When it comes to the future of commerce, frictionless e-commerce is the way to go. The sheer growth of in-app purchases across SaaS sectors like gaming, entertainment and e-commerce makes it clear that Indian consumers want to stay within the native experience while they make any purchases, and they need it to be instant and easy. A recent report by Essence suggested that 49% of Indian consumers purchase items via social media, and three out of four people surveyed said they are likely to buy through social media in the future. This consumer desire, along with many other factors, has led to the rise of contextual commerce, and payments.
For many years, banks and traditional financial institutions have approached online payments with a product-centric mindset, often resulting in a frustrating user experience. While on one hand P2P payments services have been simplified with UPI, BNPL and e-wallets, enterprise payments are still couched in obscure acronyms. Clearly, an online experience has to be as simple and intuitive as using some of the new-age commerce, communication or entertainment apps.
The answer to this industry challenge is in understanding exactly what a user is trying to achieve with a specific transaction, and customizing their payment based on their need. Who are they paying? How are they connected? How stable is their internet connection? What are they paying for? What is the frequency of the payment? What is likely to be the best payment method for the transaction? With this contextual information, payment gateway companies can recommend which payment method and offer is most appropriate for a specific situation, rather than expecting users to waste precious time exploring each offer, and work it out by themselves.
This shift to contextual payments will be a massive shift for payment gateways, as it will mark a move away purely from judging a payment experience in binary terms - successful or unsuccessful to focusing on context, seamlessness and effectiveness of each AI-led recommendation. This shift to “contextual payments” will not only guarantee vastly improved customer experience, but also ensure greater internal efficiency and even higher revenue potential.
Optimal Routes For A Payment
A smarter & contextual approach to payments is based on intelligent route calculation for every transaction. Relevant data points have to be mapped against the user profile (based on cookies, user’s mobile number and transaction amount), as well as the client risk and available payment modes. The best solution can then be suggested, thus creating a ‘self-service’ model for payment fulfillment that can be executed within seconds.
These contextual payments are also highly efficient. While human inputs (card information, UPI IDs, etc) are always subject to error, intelligent algorithms identify the optimal routes with superior consistency. The result is dramatically improved operational efficiency for the brand and the payment gateway, along with unprecedented straight-through-processing rates. With rising competition across all major sectors, contextual payments will equip brands to convert potential customers faster and more effectively than ever before.
New Avenues For Seamless Cross-Selling
Embracing contextual payments is not purely about staying afloat amid a tide of change. It’s about rising above the rest, and finding newer and more innovative ways of conducting business. Indeed, the relationship manager – long overstretched by the competing demands of execution and cross-selling – may just have found a new best friend.
By integrating contextual payments with other apps such as the bank’s product catalog and a wealth management platform, the contextual payments platform can not only identify and notify clients of the optimal product currently available to them, but potentially offer an even better option that is not yet have been in the client’s view.
This represents a huge cross-selling opportunity for the financial services industry – providing clients with exactly what they need, exactly when they need it. And best of all, it comes with the authority of a reliable algorithm and without the pestering of a salesperson over call or email.
In a time of fierce competition and tightened margins for fintechs and banks across India, contextual payments offer a way for these institutions to thrive – fighting off competitors with a simple customer interface, seamlessly integrated into clients’ everyday processes. The contextual payment experience will bring happier customers, greater efficiency and higher revenues are all within a brand’s grasp.